Changing Producer Payment Method- Direct Bill- Transact and Reconcile

Product: TAM Series 6 and 7

This document explains the steps necessary to change the method of paying producers for direct bill business when on a Transact and Reconcile Direct Bill basis. Manual tracking will be involved for a few months to ensure that a producer is properly compensated (neither overpaid nor underpaid).  

GL Setup

Use this to determine last month posted, if the agency accepts Month-End journal entries for producers, and the current Direct Bill Reconciliation Method.

Series 6

  1. Log into TAM.
  2. Select Options.
  3. Select The Agency Manager for DOS.
  4. Prior to version 6.3, Select Utilities, then 6. Accounting Setup. On version 6.3, select Utilities Menu, System Setup, Accounting Setup.
  5. Select 8 Check GL Setup Options.  When prompted, "Ok to proceed?" answer Yes.

Series 7 

  1. Log into TAM.
  2. Access Utilities.
  3. Select Accounting.
  4. Select Setup.
  5. Select GL Setup Report.

Note: An agency may be set up to accept Month-End Journal entries for producers as a whole, but individual producers can be switched on or off at the producer file level. It is assumed that an agency knows whether or not Producer Month-End Journal entries are used and which producers employ this option.

Changing From Invoiced to a Paid Basis

When paying producers on paid items, you must be reconciling direct bill business. The producer payment is based on a COM (Company Direct Bill Commission Payment) transaction. This transaction type is created during the reconciliation process. The procedure below assumes that all Direct Bill Items have been reconciled that have been paid to the agency by the company.  

The concern is to verify that producers are not paid commission in excess due to the method change. When paying Producers on an Invoiced basis, any Direct Bill items invoiced in a posted month have been paid to the producer regardless of whether the agency has been paid by the company. The following instructions ensure that any items already paid to the producer are not paid again when the company pays the agency (when the item is reconciled). Modifications to General Ledger Account Balances are dependent on whether or not the Agency accepts Month-End journal entries for producers.

Note:  The switch in methods must occur prior to accepting Month-End Journal Entries in the current accounting month. 

The Reports

Run a Production report with all of the parameters set to ALL except for the following noted criteria:

Series 6-DOSTAM Reports

Production Report

To run the Production Report

  1. Access Options.
  2. Select The Agency Manager for DOS.
  3. Select Reports - Management.
  4. Select Production Report.
  5. Date range starting with the first month on TAM through the last month posted.
  6. Output parameter is set to Complete Report.
  7. Run it only for direct bill items; show direct bill production items.
  8. Sort by Producer. Include the item in totals for all producers and subtotal.
  9. Extra Criteria: AMT <> 0 in all caps.  (The <> is the less than < and greater than > signs. The 0 is the number zero.)

Series 7 TAM Reports and Series 6 WinReports

Production Report

To run the Production Report

  1. Access Reports.
  2. Select Reports - Management.
  3. Select Production Report.
  4. Click the Criteria tab.
  5. Select Date Selection, Accounting Month. Select the first month on TAM through the last posted month
  6. Select Bill Mode, Direct Bill - Production Items.
  7. Select Major Sort, Producer Only.
  8. Select Extra Criteria, and type in Transact.amt <> 0 (The <> is the less than < and greater than > signs.  The 0 is the number zero.)
  9. Select Output, Select Complete Report.

Note : When running the report and prompted "Include item in totals for 1st Producer?" click No The next prompt will be "Include item in totals for All Producers?" Click Yes.  

The report reflects all direct bill items that have a balance remaining. This report  reflects all items where the producer has been paid but the agency has either not been paid at all or only paid partially.  Print this report and save it for manual tracking. Manual tracking is required to ensure that the producer is not paid twice for the same item.

Option 1

The agency is set up to accept Month-End Journal Entries to Producers. 

Option 2

The agency is set up to not accept Month-End Journal Entries for Producers. 

Tip: Run a Direct Bill report for items unpaid by the company. When the items from the production report no longer appear on this report, the items are fully reconciled and no longer need to be tracked.

To make the change to the producer payment method, follow the appropriate version directions below.

Series 6

  1. Open an MS_DOS prompt and access the TAM drive. (If TAM is on F:, type F: and press [Enter].)
  2. Type CD\TAM and press [Enter].
  3. Type \NETINFO and press [Enter].
  4. Type SYS_INST and press [Enter].
  5. Answer Yes to Proceed, and enter the Executive Usercode and Password.
  6. If a print box displays, select Quit.
  7. Select 2 Initial TAM Setup.
  8. Select3 Install Month-End Options.
  9. Select 4 Producer payment
  10. Select Pay on paid items
  11. Select End to exit back to the MS_DOS prompt.

Series 7

  1. Click Start.
  2. Select Programs.
  3. Select Applied Systems Group.
  4. Select System Installation.
  5. Enter the Usercode and Password.
  6. Select Install Month-End Options.
  7. Select Producer Payment Method.
  8. Select Producer Paid  on paid items under Direct Bill.
  9. Exit System Installation.

Changing from a Paid to an Invoiced Basis 

Two concerns regarding this change must be addressed. 

  1. Any items in a posted month which have not had any payments made by the company. These items should be recorded as a journal entry crediting the producer payable account and debiting the producer expense account. This is the only way the producer will be compensated for these items, as the producers were compensated on a paid basis at the time these were invoiced.
  2. Those items that have already had partial payments made by the company, but not fully paid to the agency. These are more complicated. A journal entry is required to the producer payable and expense for the amount remaining to be paid to the producer. Part of the producer's commission has been paid; the remainder should be recorded as a journal entry and the producer duly compensated.  

Note: The switch in methods must occur prior to accepting Month-End Journal Entries in the current accounting month.

First, focus on those items that still have the full Direct Bill Balance on them (meaning that the company has made no payments at all against this item). The concern is about items in posted months.

Run a Production report with all of the parameters set to ALL except for the following noted criteria:

Series 6-DOSTAM Reports

Production Report

To run the Production Report

  1. Access Options.
  2. Select The Agency Manager for DOS.
  3. Select Reports - Management.
  4. Select Production Report.
  5. Select a date range starting with the first month you were on TAM through the last month you have posted.
  6. Output parameter is set to Complete Report.
  7. Run it only for direct bill items; show direct bill production items.
  8. Sort by Producer and say to include the item in totals for all producers and subtotal.
  9. Extra Criteria: AMT=TBAL in all caps.

Series 7 TAM Reports and Series 6 WinReports

Production Report

To run the Production Report

  1. Access Reports.
  2. Select Reports - Management.
  3. Select Production Report.
  4. Click the Criteria tab.
  5. Select Date Selection, Accounting Month. Select the first month on TAM through the last posted month.
  6. Select Bill Mode, Select Direct Bill - Production Items.
  7. Select Major Sort, Producer Only.
  8. Select Extra Criteria. Type in Transact.amt = Transact.tbal
  9. Select Output, Complete Report.

Note: When running the report and prompted "Include item in totals for 1st Producer?" click No. The next prompt will be "Include item in totals for All Producers?" Click Yes.  

This report reflects all direct bill items that have the full Direct Bill Balance remaining. The producer commission is the total amount of commission that would have been paid to the producer had he or she been paid on an invoiced basis.

Next, items that have already been partially paid by the company but not fully paid must be determined. These are a little more complicated.

Run a Production report with all of the parameters set to ALL except for the following:

Series 6-DOSTAM Reports

Production Report

To run the Production Report

  1. Access Options.
  2. Select The Agency Manager for DOS.
  3. Select Reports - Management.
  4. Select Production Report.
  5. Select a date range starting with the first month you were on TAM through the last month you have posted.
  6. Output parameter is set to Complete Report.
  7. Run it only for direct bill items; show direct bill production items.
  8. Sort by Producer and say to include the item in totals for all producers and subtotal.
  9. Extra Criteria: When running the report in DOSTAM, type AMT<>TBAL .AND. TBAL<>0 in all caps.  (The <> is the less than < and greater than > signs.  The 0 is the number zero.)

Series 7-Reports and Series 6 Winreports

Production Report

To run the Production Report

  1. Access Reports.
  2. Select Reports - Management.
  3. Select Production Report.
  4. Click the Criteria tab
  5. Select Date Selection, Accounting Month. Select the first month on TAM through the last posted month
  6. Select Bill Mode, Direct Bill - Production Items.
  7. Select Major Sort, Producer Only, Subtotal by Sort/No Page Break.
  8. Select Extra Criteria. Type in Transact.amt<> Transact.tbal .AND. Transact.tbal <> 0.  (The <> is the less than < and greater than > signs.  The 0 is the number zero.)
  9. Select Output, Select Complete Report

Note: When running the report and prompted "Include item in totals for 1st Producer?" click No. The next prompt will be "Include item in totals for All Producers?" Click Yes.  

This is a list of direct bill items that have part of the Direct Bill Balance remaining. This is a list of items that have already partially posted to the producer payable and expense accounts. Next, determine what is the portion that has been paid to the producers already for these items and what is the remainder that compensation should be made to the producers based on the new method.

The only way to determine what the producer has been paid for these items is to look up each customer individually and view transactions using an open item view.

Open Item View

  1. Select the client.
  2. Select Transact List (Invoices button).
  3. Double click Filter.
  4. Select Open Items, Open Item view mode, direct bill.
  5. Click OK.

Multiply the item balance by the producer commission percentage to calculate the amount owed to the producer on each item. Once this amount is determined, select the correct option below to compensate the producers.

To make the change to the producer payment method, please follow directions below.

Series 6

  1. Open an MS_DOS prompt and access the TAM drive. (If TAM is on F:, type F: and press [Enter].)
  2. Type CD\TAM and press [Enter].
  3. Type \NETINFO and press [Enter].
  4. Type SYS_INST and press [Enter].
  5. Answer Yes to proceed, and enter the Executive Usercode and Password.
  6. If a print box displays, select Quit.
  7. Select 2 Initial TAM Setup.
  8. Select3 Install Month-End Options.
  9. Select 4 Producer Payment.
  10. Select Pay on Invoiced items.
  11. Select End to exit back to the MS_DOS prompt.

Series 7

  1. Click Start.
  2. Select Programs.
  3. Select Applied Systems Group.
  4. Select System Installation.
  5. Enter the Usercode and Password.
  6. Select Install Month-End Options.
  7. Select Producer Payment Method.
  8. Select Producer Paid on Invoiced Items.
  9. Exit System Installation

Tip: Run a Direct Bill report for items unpaid by the company. When the items from the production report no longer appear on this report, the items are fully reconciled and no longer need to be tracked.

Last Revised: February 19, 2008 02:24 PM

SWE1979